Is it that time already? Atari, whatever that name actually means, is once again announcing it’s having a financial wobble. You could set your watch by how regularly this occurs. Who could have thought that launching a console no one wanted, while investing in crypto grifts, wasn’t the path to riches for a flailing company with nothing up its sleeve but a once-respected brand name?
Atari died in 1984. Ever since, its cursed skin has been loosely and uncomfortably wriggled into by a series of companies, each falling to its bedeviled blight, only freed when it tricks another corporation into donning the rotting skin-suit. Even the version of the company that released the Atari ST in the mid-80s was the result of financial collapses, divisions, rebrandings, and part-ownership by many corporations. Its history of being bought and sold is bewildering, the name being variously owned by Namco, Warner, Mitsubishi, JTS Corp, WMS Industries, Hasbro Interactive, and Infogrames. This ship of Theseus has been sinking for decades.
The latest company ghoulishly pretending to be Atari is almost impossible to identify, but sort of began as a rebranding of Infogrames, almost getting bought by Namco Bandai, at one point employing a reported total of 10 people, before going through yet another bankruptcy, an attempt at being a casino games company, and recently, the embarrassing mess that is the Atari VCS: a console it seems very few want. And then it discovered crypto.
The (modern) VCS was intended to be this retro love-in, a PC-based console produced by that name you remember your dad loving in the early ‘80s, styled to look like it time-traveled from the Reagan years. Raising funds via IndieGoGo, the obviously doomed project somehow pulled in over $3 million from backers, although this somewhat fell short of its deranged target of $100m. It then finally came out in 2020, after multiple delays, just after the PS5 and Xbox Series X, paling in comparison to both. According to financial reports released this week, it’s…not gone too well.
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As Tom’s Hardware noticed, the half-year earnings show that while 2021’s equivalent hardware revenue was $4.65 million, this year’s were only $212,466. That’s a whopping 92 percent drop, and the report itself identifies the problem as “underperformance by the VCS.”
As a result, whatever Atari actually is at the moment says it has dedicated the first half of the financial year to the (deep breath) “reorganization of the Hardware line of business which includes the suspension of direct hardware manufacturing relationships, notably with regards to the Atari VCS, for which a new commercial strategy has been implemented as of the end of the calendar year 2022 and that will continue in calendar year 2023.” I hope no one had to read that sentence out loud.
However, Atari is not abandoning the console no child ever wrote to Santa for. The report continues, “In parallel, Atari is considering developing new hardware complementary to the Atari VCS with partners under licensing contracts.” It also insisted to Tom’s Hardware that “Atari remains committed to the VCS platform,” explaining more support for developers has been added, more old games included, and the intention to “expand the VCS ecosystem and create additional utility for users.”
You know what else it’s remaining dedicated to? Crypto bullshit! The report boldly declares that “the first half of the period was primarily focused on laying the foundation of Atari X which included collaborations and partnerships with Web3 partners as well as the implementation of NFT sales that were successful, despite unfavorable market conditions for blockchain-related activities.”
Is Atari X the same as the Atari Token, the company’s 2020 crypto nonsense? I just couldn’t care less, but have still discovered it’s not. The company launched the Token in partnership with the ICICB Group, an organization it’s just announced it’s done with. This week’s report mentions “licensing contracts that never materialized” with regards to ICICB, saying that all licensing agreements between the two were “terminated effective April 18, 2022,” writing off €11m ($11.6m) from its accounting records. The section adds, “Atari announced its intent to create a new token with a focus on gaming, community, and utility.”
If you’re wondering what ICICB is, so am I, and that’s after reading the company’s “About” page. I swear this is real and not a spoof I wrote:
Based on an overall strategy for value creation from group integration and the application of “selection and concentration” tests to businesses as well as synergy creation from integrating business management functions, and innovative tools & technology, the ICICB Group demonstrates significant growth in the banking and financial sector.
So yes, after the roaring success of Atari Token, Atari “reaffirms its commitment to blockchain business” by launching Atari X instead, adding that this also proves its “belief that blockchain could be an important element of Atari’s business and strategy.”
“Could be”!
As Eurogamer adds, all this commitment and dedication has resulted in Atari reporting “a liquidity shortfall and additional financing requirements.” In other words, it needs more money. Not surprisingly, given an overall loss of €5.4 million ($5.7m), significantly worse than last year’s loss of €3.5 million ($3.7m).
We’ve reached out to Atari to ask if it’s still tied up in Atari Token, and why it’s planning to continue to invest in the VCS after its obvious flop. We also asked if its hotel ventures with ICICB are still going ahead following that split, because, yup, it was building hotels. We’ll update if we hear back.
With any luck, 2023 will be the year that trying to rely on nostalgia for the games of 40 years ago and investing in crypto will finally pay off for Atari!